Investors shun robo-advice despite drive to launch online solutions

The UK’s wealthiest investors are rejecting robo-advice solutions despite rising numbers of start-ups and established financial services companies entering the online space, Legg Mason’s 2016 Global Investment Study has found.
Despite a proliferation of offerings in the UK – and predictions that several high street banks are poised to launch their own propositions in the near future – only a third of investors aged 40-75 in the survey (37%) said they trusted robo-advice.
This compares to 69% of investors who trust their existing financial adviser. Just 33% of respondents added they were comfortable receiving advice through an online platform (robo-adviser), well below the 62% who said they were comfortable with their financial adviser.
Overseas investors echoed these sentiments, with just 39% of respondents globally expressing trust in online advice, while 38% are comfortable with such offerings.
Only blogs and online forums are less trusted than online advice among the UK’s wealthiest investors. Instead, investors preferred to seek the views of the media, or their family and colleagues, before turning to robo-advice, with a respective 68% and 55% of respondents having trust in those alternative sources of advice.
Adam Gent, Head of UK Sales, Legg Mason said: “The survey clearly suggests that, while many robo-advisers are targeting wealthy clients who have traditionally used an IFA or wealth manager, they have a real struggle ahead to persuade investors to make the switch.
“Robo-advice is a relatively new concept in the UK so it may be that it grows in popularity over the coming years. But the bottom line appears to be that wealthy investors, at least for the time being, simply prefer the personal touch that face-to-face advice delivers, both here and abroad.”
 
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